Featured Product

    APRA Amends Prudential Standards in Line with CPS 320 and GPS 340

    March 19, 2019

    APRA issued a letter to all general insurers, life insurers, and private health insurers proposing minor changes to the prudential framework to implement the cross-industry appointed actuary standard. APRA is making amendments to thirteen prudential standards to reflect consequential changes arising from the introduction of the new Prudential Standard CPS 320 Actuarial and Related Matters (CPS 320) and Prudential Standard GPS 340 Insurance Liability Valuation (GPS 340). APRA intends to finalize the revised standards in April 2019. The standards will commence on July 01, 2019.

    The changes primarily replace references to revoked standards, update references from Insurance Liability Valuation Report (ILVR) to Actuarial Valuation Report (AVR), streamline clauses regarding exercises of discretion by APRA under previous prudential standards, delete outdated transitional provisions, and correct typographical errors. The following prudential standards are being amended:

    • CPS 220 on Risk Management
    • CPS 510 on Governance
    • GPS 110 on Capital Adequacy
    • GPS 112 on Capital Adequacy Measurement of Capital
    • GPS 113 on Capital Adequacy Internal Model-based Method
    • GPS 114 on Capital Adequacy Asset Risk Charge
    • GPS 115 on Capital Adequacy Insurance Risk Charge
    • GPS 116 on Capital Adequacy Insurance Concentration Risk Charge
    • GPS 118 on Capital Adequacy Operational Risk Charge
    • GPS 120 on Assets in Australia
    • GPS 310 on Audit and Related Matters
    • HPS 310 on Audit and Related Matters
    • LPS 700 on Friendly Society Benefit Funds

    For general insurers, three minor changes to GPS 116 will also be made to reflect the current definitions and expectations of APRA. The revised GPS 116:

    • Removes reinsurance premium protection and capital market structures from the definition of alternative capital and risk mitigants in paragraphs 54 and Attachment B, paragraph 13, as these types of arrangements are more aligned with traditional reinsurance
    • Clarifies expectation that the Appointed Actuary include both details of the determination of the net premium liability provision which relates to catastrophic losses (the PL offset) for the reporting year and the estimated PL offset to be utilized in the upcoming year in the AVR
    • Continues the existing requirement that the Group Actuary provide the board of a Level 2 insurance group with an opinion on the Insurance Concentration Risk Charge whenever substantial changes are made or at least annually (at Attachment B, paragraph 18)


    Related Links

    Keywords: Asia Pacific, Australia, Insurance, Actuary, CPS 320, GPS 340, Risk Management, Capital Adequacy, Governance, APRA

    Featured Experts
    Related Articles

    BIS and BoE Launch Innovation Hub in London

    BIS and BoE launched the BIS Innovation Hub Center in London, which is the fourth new Innovation Hub Centre to be opened in the past two years.

    June 11, 2021 WebPage Regulatory News

    ESRB Recommends Reciprocation of Certain Macroprudential Measures

    ESRB published recommendations on the reciprocation of macro-prudential measures in Belgium, France, Luxembourg, Norway, and Sweden.

    June 11, 2021 WebPage Regulatory News

    EC Publishes Regulation on Key Aspects of Implementation of SA-CCR

    EC published the Delegated Regulation 2021/931, which supplements the Capital Requirements Regulation (CRR or Regulation 575/2013) with regard to the regulatory technical standards specifying the method for identifying derivative transactions with one or more than one material risk driver.

    June 10, 2021 WebPage Regulatory News

    BCBS Consults on Prudential Treatment of Cryptoasset Exposures

    BCBS is consulting on preliminary proposals for the prudential treatment of cryptoasset exposures of banks.

    June 10, 2021 WebPage Regulatory News

    EBA Revises List of Validation Rules for Reporting

    EBA issued a revised list of validation rules under the implementing technical standards on supervisory reporting.

    June 10, 2021 WebPage Regulatory News

    Banking Authorities and Private Sector Collaborate on Wholesale CBDC

    BIS Innovation Hub, BDF, and SNB announced that, together with a private-sector consortium led by Accenture, they will conduct an experiment using wholesale central bank digital currency (wCBDC) for cross-border settlement.

    June 10, 2021 WebPage Regulatory News

    ESAs Publish Amended Implementing Standards on Mapping of ECAIs

    ESAs published two amended implementing technical standards on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs).

    June 10, 2021 WebPage Regulatory News

    EBA Revises Guidelines on Major Incident Reporting Under PSD2

    EBA published revised guidelines on major incident reporting under the Payment Service Directive (PSD2).

    June 10, 2021 WebPage Regulatory News

    BCBS Updates Supporting Information for G-SIB Assessment in June 2021

    BCBS updated the year-end and annual average exchange rates in context of the global systemically important bank (G-SIB) assessment exercise.

    June 10, 2021 WebPage Regulatory News

    HKMA Revises Implementation Timeline for Basel Standards

    HKMA issued a circular informing the industry about its intention to revise the target effective dates for the revised frameworks on credit risk, operational risk, output floor, leverage ratio, market risk, and credit valuation adjustment risk.

    June 10, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7083